Double the return

HR Owen’s return on sales has not been where it needs to be, sitting at under 1% ROS in 2011. The group is making progress towards a more profitable business. Doyle is confident the group can double its profitability before 2014.

The momentum HR Owen generated during the first half of 2012 has continued into Q3 and Doyle is confident for the year ahead.

The business is heavily weighted towards new car sales, with more than 50% of its profitability coming from that area. While new car sales were up 10% over the first half of 2012, the business needs to boost used volumes and service hours to help it reach its profit goal.

Doyle said: “We’ve had a look at 2013 and there will be some elements that are going to make it tough for us. All the new product launches for our brands will be in the second half of the year so it’s really important for us to get our operations in order and our used car sales up to full potential. We also need to make sure we’re pursuing additional revenue streams.”

HR Owen is expecting to boost used car sales up by 10% due to a change in process to act as a group, rather than separate businesses.

The group has broadened its stock profile moving from only stocking nearly new to cars up to six years old. The business has also invested in more resource with its specialist buying team growing from two to three full-time employees to help source stock.

There are now also used car managers and specialists to create more of a focus on used car sales.

HR Owen’s website redesign means used car stock can be pushed out online and the time it takes to upload each vehicle has been cut from 15 minutes to three minutes.

The group will also be looking to make more from finance by introducing a larger range of products, as well as an added value mobility package and potential leasing business.

The mobility package will be available to HR Owen customers as part of their purchase to keep customers mobile.
The leasing business could launch this year.

Doyle said: “Some of our customers might have a Bentley or Ferrari which they drive, but they might need a Volkswagen Polo for the nanny on the weekend or something for the son.

“It’s all about how we fulfil our customers’ requirements. How do we make them feel like part of the family and take care of their problems? We will be able to satisfy a need for customers and make some incremental revenue from it too.”

Social media is on the radar for 2013, but it’s an area HR Owen has pursued only on an ad-hoc basis, with Doyle highlighting the importance of getting the business in order and the basics right first.

The aftersales business will be boosted due to more control over customer data and the sophistication of the marketing process handled by the new CRM.

This will help to pull in more customers for servicing in addition to HR Owen’s specialist classic restoration business and its role of maintaining the Queen’s fleet of Bentleys at its Jack Barclay business.

No quick fix for 2013

Doyle admits there will be no quick fixes this year for the automotive industry.

He said: “I think there will be some growth in 2013, probably around 1% on GDP. I don’t think we’re going to get to any one year and see a sudden take up.

“We’ve been working pretty hard for the last four years getting ourselves out of the recession and I can see it continuing that way for another four years to come.

“For the brands we represent, I know 2014 will be an incredibly strong year for us due to the product cycle in that period.”

The group is currently considering opportunities for expansion and one option will be resolved in Q1.